KERALA

Kerala is a small state tucked away in the southwest corner of India. Though it represents only 1.18% of the total area of India, 3.43% of the total population of the country lives within it. The state has the advantage of good local administration, good state government support to industry and proximity to markets and ports.

Owing to historical and climatic reasons, the state has developed commercial agriculture more than food crops. Consequentially, the state is short in food grains. It is the single largest producer of a number of crops like banana and ginger. Tea and coffee too are produced in abundance. Coir and Cashew are two of the largest traditional industries in the state.

Land area: 38,863 sq. km.
Population: 29 million
Capital: Thiruvananthapuram
Per Capita Income: Rs 6,983
Inflation Rate: 6.6%

Kerala has a well-developed rail, ports and telecommunications infrastructure covering all parts of the state. The state has high levels of literacy and a remarkably stable political situation. The cost of labor in this state is relatively high. Government incentives to industries other than tourism are also less.

Incentives:

• 50% KSIDC subsidy on feasibility studies for medium and large-scale industries
• 15% fixed capital investment subsidy (up to Rs 2,000,000) for priority sector
• 2-year sales tax holiday for self-employment units with turnover below Rs 200,000
• 5-year freeze on power tariff hikes for new industrial units
• 15% price preference for small and medium-scale units; 10% price preference for large-scale units
• Sales tax exemption for 7 years of 100% of fixed capital investment for new units
• Sales tax deferment for 10 years of 100% of fixed capital investment for new units
• Labor Development Offices to ensure that work does not suffer due to disputes in new enterprises